Case: 1:20-cv-02658 Document #: 50 Filed: 09/29/20 Page 1 of 8 PageID #:612
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`UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF ILLINOIS
`EASTERN DIVISION
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`UNITED STATES OF AMERICA,
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`COMMONWEALTH OF MASSACHUSETTS
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`and
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`STATE OF WISCONSIN
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`Plaintiffs,
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`v.
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`DAIRY FARMERS OF AMERICA, INC.
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`and
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`DEAN FOODS COMPANY,
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`Defendants.
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`No. 20 C 2658
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` Judge Feinerman
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`UNITED STATES’ MOTION AND MEMORANDUM
`IN SUPPORT OF ENTRY OF FINAL JUDGMENT
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`Pursuant to Section 2(b) of the Antitrust Procedures and Penalties Act (“APPA”),
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`15 U.S.C. § 16(b)-(h), the United States of America (“United States”) moves the Court to enter
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`the proposed Final Judgment filed in this civil antitrust proceeding on May 1, 2020 (Docket No.
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`4-2) (attached as Exhibit A). As set forth in the Asset Preservation and Hold Separate
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`Stipulation and Order (“Stipulation and Order”) dated May 1, 2020 (Docket. No. 7), Defendants
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`stipulated that the Final Judgment could be filed with and entered by the Court, upon the motion
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`of any party or upon the Court’s own motion, at any time after compliance with the requirements
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`of the APPA and without further notice to any party or other proceedings.
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`The proposed Final Judgment may be entered at this time without further proceedings if
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`the Court determines that entry is in the public interest. See 15 U.S.C. § 16(e). The Competitive
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`Impact Statement (“CIS”) and Response of the United States to Public Comments on the
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`Proposed Final Judgment (“Response to Public Comments”) filed in this matter on May 26,
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`2020, and September 14, 2020, respectively, (Docket No. 16 and Docket No. 42) explain why
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`entry of the proposed Final Judgment is in the public interest. The United States is also filing a
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`Certificate of Compliance (attached as Exhibit B) showing that the parties have complied with all
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`applicable provisions of the APPA and certifying that the 60-day statutory public comment
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`period has expired.
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`I.
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`BACKGROUND
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`Dean Foods Company (“Dean”) filed for bankruptcy on November 12, 2019, in the
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`United States Bankruptcy Court for the Southern District of Texas. The bankruptcy court
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`ordered an auction and then accelerated the auction process because of Dean’s liquidity
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`condition. On March 30, 2020, Dairy Farmers of America, Inc. (“DFA”) bid for 44 of Dean’s
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`plants for a total value of $433 million.1 No other bidder submitted a bid for all of the 44 Dean
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`plants, or anything even close to that number of plants, under the bankruptcy court’s schedule.
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`The bid was accepted by Dean and was the only transaction for those 44 plants approved by the
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`bankruptcy court.
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`On May 1, 2020, the United States, along with the State of Wisconsin and the
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`Commonwealth of Massachusetts, filed a civil antitrust Complaint seeking to enjoin the
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`1 During its investigation, the Department also expressed concerns to DFA and Dean about the
`potential loss of competition for the sale and processing of fluid milk if DFA were to
`acquire Dean’s fluid milk processing plants in Minnesota, South Dakota and North Dakota. DFA
`subsequently ceased its efforts to acquire those plants.
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`proposed transaction. The Complaint alleges that DFA and Dean compete head-to-head to sell
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`fluid milk to customers, including supermarkets, schools, convenience stores, and hospitals, and
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`that the likely effect of this transaction would be to substantially lessen competition for the
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`processing and sale of fluid milk in areas encompassing (1) northeastern Illinois and Wisconsin
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`and (2) New England in violation of Section 7 of the Clayton Act, 15 U.S.C. § 18. This loss of
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`competition likely would result in higher prices, lower quality service, and lower quality
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`products for customers.
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`At the same time the Complaint was filed, the United States also filed a proposed Final
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`Judgment, a Stipulation and Order (Docket No. 4), and subsequently filed a Competitive Impact
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`Statement, describing the events giving rise to the alleged violation and the proposed Final
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`Judgment. The Stipulation and Order, which was agreed to by the parties and which was entered
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`by the Court on May 1, 2020, provides that the proposed Final Judgment may be entered by the
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`Court once the requirements of the APPA have been met. The proposed Final Judgment requires
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`Defendants to divest Dean’s fluid milk processing plants, ancillary facilities, and related tangible
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`and intangible assets located in Franklin, Massachusetts (“Franklin Plant”); De Pere, Wisconsin
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`(“De Pere Plant”); and Harvard, Illinois (“Harvard Plant”) (collectively the “Divestiture Plants”).
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`Entry of the proposed Final Judgment will terminate this action, except that the Court will retain
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`jurisdiction to construe, modify, or enforce the provisions of the Final Judgment and to punish
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`violations thereof.
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`II.
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`COMPLIANCE WITH THE APPA
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`The Certificate of Compliance filed with this Motion and Memorandum states that all the
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`requirements of the APPA have been satisfied. In particular, the APPA requires a 60-day period for
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`the submission of written comments relating to the proposed Final Judgment. See 15 U.S.C.
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`§ 16(b). In compliance with the APPA, the United States filed the proposed Final Judgment and
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`the CIS with the Court on May 1, 2020 and May 26, 2020, respectively; published the proposed
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`Final Judgment and CIS in the Federal Register on June 2, 2020, see 85 Fed. Reg. 33,712
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`(2020); and caused a summary of the terms of the proposed Final Judgment and the CIS, along
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`with directions for the submission of written comments, to be published in The Washington Post,
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`Chicago Tribune, and Boston Globe on June 1–4 and June 8–10, 2020. The 60-day period for
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`public comment ended on August 10, 2020. The United States received one comment. Pursuant
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`to 15 U.S.C. § 16(d), the United States filed a Response to Comments on September 14, 2020,
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`and published it and the public comment in the Federal Register on September 18, 2020. See 85
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`Fed. Reg. 58,387 (2020).
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`III.
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`STANDARD OF JUDICIAL REVIEW
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`Before entering the proposed Final Judgment, the APPA requires the Court to determine
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`whether the proposed Final Judgment “is in the public interest.” 15 U.S.C. § 16(e)(1). In
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`making that determination, the Court, in accordance with the statute as amended in 2004, “shall
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`consider”:
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`(A)
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`the competitive impact of such judgment, including termination of alleged
`violations, provisions for enforcement and modification, duration of relief
`sought, anticipated effects of alternative remedies actually considered,
`whether its terms are ambiguous, and any other competitive considerations
`bearing upon the adequacy of such judgment that the court deems
`necessary to a determination of whether the consent judgment is in the
`public interest; and
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`the impact of entry of such judgment upon competition in the relevant
`market or markets, upon the public generally and individuals alleging
`specific injury from the violations set forth in the complaint including
`consideration of the public benefit, if any, to be derived from a
`determination of the issues at trial.
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`15 U.S.C. § 16(e)(1)(A), (B). Section 16(e)(2) of the APPA states that “[n]othing in this section
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`(B)
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`shall be construed to require the court to conduct an evidentiary hearing or to require the court to
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`permit anyone to intervene.” 15 U.S.C. § 16(e)(2). In its CIS and Response to Public
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`Comments, the United States explained the meaning and the proper application of the public
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`interest standard under the APPA to this case and now incorporates those statements by
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`reference.
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`IV. ENTRY OF THE PROPOSED FINAL JUDGMENT IS IN THE PUBLIC
`INTEREST
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`The United States alleged in its Complaint that the proposed merger, without the remedy
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`in the proposed Final Judgment, would have substantially lessened competition for the
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`processing and sale of fluid milk in two geographic markets—northeastern Illinois and
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`Wisconsin, and New England—in violation of Section 7 of the Clayton Act, 15 U.S.C. § 18. As
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`explained in the CIS and the Response to Public Comments, the proposed Final Judgment is
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`designed to eliminate the likely anticompetitive effects of the acquisition alleged by the United
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`States by requiring Defendants to divest Dean’s fluid milk processing plants, ancillary facilities,
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`and related tangible and intangible assets. The public, including affected competitors and
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`customers, has had the opportunity to comment on the proposed Final Judgment. As explained
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`in the CIS and the Response to Public Comments, entry of the proposed Final Judgment is in the
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`public interest.
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`V.
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`CONCLUSION
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`For the reasons set forth in this Motion and Memorandum, and in the CIS and the
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`Response to Public Comments, the United States respectfully requests that the Court find that the
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`proposed Final Judgment is in the public interest and enter the proposed Final Judgment.
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`Dated: September 29, 2020
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`Respectfully submitted,
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`/s/ Karl D. Knutsen
`Karl D. Knutsen
`Justin Heipp
`Nathaniel J. Harris
`Christopher A. Wetzel
`U.S. Department of Justice
`Antitrust Division
`Healthcare and Consumer Products Section
`450 Fifth Street, NW, Suite 4100
`Washington, DC 20530
`202-514-0976
`karl.knutsen@usdoj.gov
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`COUNSEL FOR PLAINTIFF
`UNITED STATES OF AMERICA
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`Case: 1:20-cv-02658 Document #: 50 Filed: 09/29/20 Page 7 of 8 PageID #:618
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`CERTIFICATE OF SERVICE
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`I, Karl D. Knutsen, hereby certify that on September 29, 2020, I caused a copy of the
`foregoing Motion for The Entry of Final Judgment to be served on Defendants by mailing the
`document electronically to their duly authorized legal representatives as follows:
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`For Defendant Dairy Farmers of America, Inc.:
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`W. TODD MILLER
`Baker & Miller
`2401 Pennsylvania Ave., NW
`Washington, DC 20037
`Tel: (202) 663-7822
`Fax: (202) 663-7849
`tmiller@bakerandmiller.com
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`MICHAEL G. EGGE
`Latham & Watkins LLP
`555 Eleventh Street, NW, Suite 1000
`Washington, DC 20004
`Tel: (202) 637-2285
`Fax: (202) 637-2201
`michael.egge@lw.com
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`GARRET RASMUSSEN
`Orrick Herrington & Sutcliffe LLP
`Columbia Center
`1152 15th Street, N.W.
`Washington, DC 20005
`Tel: (202) 339-8481
`Fax: (202) 339-8500
`grasmussen@orrick.com
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`For Defendant Dean Foods Company:
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`ARTHUR J. BURKE
`Davis Polk LLP
`450 Lexington Ave.
`New York, NY
`Tel: (212) 450-4352
`Fax: (212) 701-5800
`arthur.burke@davispolk.com
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`And other ECF registered users by ECF.
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`Case: 1:20-cv-02658 Document #: 50 Filed: 09/29/20 Page 8 of 8 PageID #:619
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` /s/ Karl D. Knutsen
`Karl D. Knutsen
`Attorney for the United States
`U.S. Department of Justice Antitrust Division
`450 Fifth Street NW, Suite 4100
`Washington, DC 20530
`Tel.: 202-514-0976
`Fax: 202-307-5802
`E-mail: karl.knutsen@usdoj.gov
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